By Susan Barreto, Editor of Alternatives Watch
Institutional investor activity was less intense than it was in February, but roughly $3 billion in new mandates were completed in private equity, private debt, hedge funds and real estate in March 2021, according to Alternatives Watch monthly investor scorecard.
For the quarter, investors poured $13 billion in the alternative investment sector as a number of high-profile private debt and equity funds closed early in the year. More capital is on the way as a number of investors are seeking out debt, macro and additional private equity commitments as stock market valuations have hit record highs so far in 2021.
Private equity mandates led the activity once again with over $1 billion in new commitments in March. Leading mandates were to TA Associates, Apax Partners and Adams Street Partners (a fund of funds program). Private debt continues to garner interest with large pensions such as Iowa Public Employees Retirement System, Boston Retirement System and others seeking out new investments in the area. Overall private debt managers saw over $800 million in new inflows for the month.
Hedge funds have been seen as making a comeback of sorts particularly in the long/short arena, as investors such as the Virginia Retirement System seek protection for potential market volatility.
BlackRock’s giant FoHF unit BlackRock Alternatives Advisors is planning to manage up to $500 million in a new registered offering of its multi-manager hedge fund product, Alternatives Watch reported in March. The $4.5 billion multi-manager hedge fund firm Titan Advisors launched the Titan Inflation Plus Fund earlier this year, implementing a top-down view that there will be inflationary pressures, particularly within commodity markets.
Credit Suisse polled over 200 institutional investors, representing $800 billion in hedge fund capital. According to the findings published in March, 70% of investors plan to make changes to their portfolio this year due to lower bond yields. Hedge funds were the favored asset class to enhance that traditional investment model, followed by high-yield credit, equities and private credit.
Meanwhile, at the $283 billion California State Teachers Retirement System (CalSTRS) trustees have been discussing important shifts within its alternative investment portfolios, including an additional allocation of up to roughly $1.8 billion to macro strategies.
Below are five largest March mandates as tracked by Alternatives Watch.
Virginia Retirement System Coatue Management $400 million
Teachers’ Retirement System of Illinois Adams Street Partners $400 million
New York State Common Retirement Fund EQT $300 million
Iowa Public Employees’ Retirement System Crestline Investors $250 million
Iowa Public Employees’ Retirement System Marathon Asset Mgmt $250 million